Raising money, Easley mined ties

State's partners, beneficiaries targeted

Staff WriterJune 21, 2009 

Former first lady Mary Easley raised money for a lecture series she ran at N.C. State University by focusing on people and companies that had business before state government or that had already been helped by her husband's administration, according to documents and interviews.

Easley's ability to bring in money was cited as a big reason that NCSU officials hired her in 2005 -- they expected a network of her contacts to open their wallets for the series.

But critics say the approach had the potential for conflicts of interest, especially after seeing the results. Records, including some turned over to a federal grand jury that is probing issues surrounding the former governor, indicate that former Provost Larry Nielsen, who hired Easley, placed a high level of importance on her fundraising work. The lecture series cost NCSU more than $400,000 for 13 speakers over three years.

A spokesman for the Easleys said Mary Easley's fundraising activity was entirely appropriate.

Mary Easley is credited with bringing in more than $180,000 over three years toward the costs of such speakers as former Sen. Bill Bradley and former federal Labor Secretary Robert Reich. Donors included major companies that lobby in Raleigh, some that had received state incentives and a cluster of government-funded boards overseen by an appointee of Mike Easley, the Democratic governor who left office in January after two terms. Among the givers:

Fidelity Investments, the company that received one of the largest state incentive packages ever in 2006 to expand in Research Triangle Park.

The state Alcohol Beverage Control Commission, which was headed by Easley appointees.

GE Nuclear of Wilmington, which received state incentives.

Blue Cross and Blue Shield of North Carolina, AT&T, Bank of America and Progress Energy, which are among the most active lobbies in the state.

Wendy Brown, an NCSU fundraiser who was assigned to help raise money for the speaker series among other duties, said in recent interviews that Mary Easley sometimes suggested asking for money from sources that Easley said "owed" the Easleys.

Brown said she agreed to an interview with The News & Observer reluctantly because she feared retribution if she spoke about her work and job. Her personnel file reflects positive reviews from supervisors -- she raised $1.5 million over two years while earning $58,000 annually -- but her position was eliminated in March by Nielsen, who cited state budget difficulties. Her husband is still on the NCSU faculty.

In general, Brown said, Mary Easley would speak to potential donors and then hand off the details on those transactions to her. Easley did not specify why potential donors might owe her husband or her, Brown said.

"Our meetings would be about companies or others that she knew, and she would -- it wasn't always -- but she would use the phrase that, 'They owe us a favor' or 'I'm calling in a favor,'" Brown said.

A spokesman for the Easleys said her money-raising efforts helped lessen the burden on taxpayers for bringing dynamic speakers to campus.

"Citizens should expect businesses to chip in when there are worthy causes," said Ace Smith, a political consultant from California working for the Easleys. "For someone to say that the governor or the first lady should not be allowed to raise money for good causes is hard to understand."

Reformers have long paid attention to payments that special interests make to elected officials, especially through campaign funds, but also to organizations that are close to public servants, such as nonprofits or employers. For example, Gov. Beverly Perdue has pledged not to ask lobbyists to contribute to charities.

Payments solicited by the wife of a sitting governor -- not for charity, but for the benefit of her job and salary -- deserved more scrutiny, said Jane Pinsky, who heads a bipartisan coalition in Raleigh that has helped bring about lobbying reforms in recent years.

"It's a problem," Pinsky said. "She was hired because of her contacts. And the businesses and others paid because they want to try and look good and they want to have access."

Her wish: less fundraising

Records provided to the grand jury indicate that Mary Easley wanted to dial back her fundraising. Notes Nielsen took after meeting with her in May 2007 show that she wanted less involvement with fundraising.

Nielsen wrote about the conversation with Easley: "Need to get out of fundraising." Smith, the spokesman for the Easleys, said that notation reflects Mary Easley's view that Brown had been hired by the provost to raise money and could have taken the lead.

A month later, however, Nielsen wrote in Easley's annual review that he looked forward to her "[c]ontinued friend and fundraising, with Wendy Brown's help, to get the seminars on a more sustainable budget."

Some of the private money paid part of Mary Easley's salary, which has been the subject of controversy since last year. She was fired June 8. About $55,000 of her $170,000 annual salary last year was covered by private sources as part of a mandate from the UNC Board of Governors after it reviewed her job duties last year.

There were no follow-up reports on that, but documents show that among the donations since that requirement was instituted was a $10,000 check from Blue Cross. Blue Cross administers the state employees' health insurance plan.

A spokesman for the insurer, Lew Borman, said the company intended for its donation to go to the costs of a speaker, not salary.

Another donor that Easley approached was GE Nuclear. The energy company received grants from a fund controlled by the governor, totaling $1.2 million, in 2005 and 2008. In between, in 2007, the Wilmington-based company donated $3,000 to sponsor a speech on the climate by a NASA scientist after Easley talked with a key official of the company.

Fidelity Investments is another example. The financial company is planning a major new campus in RTP, the result of a deal announced by Gov. Easley in the summer of 2006 that involved nearly $70 million in incentives.

E-mail messages show that Mary Easley approached Fidelity Investments in early 2008 and that it donated $1,000 to sponsor a visit by Reich, who served under President Bill Clinton. Later that year, she went back to the company's top executive in the Triangle, Kyle Rose; and records show he pledged another $1,000.

He wrote to Mary Easley at the time, though, requesting a meeting "so that we can discuss our goals and where there may be a natural intersection."

NCSU sent invoices for the payment to Fidelity three times after that, but the university never received a second payment.

Rose said in a brief interview that his company was pleased to sponsor important events at NCSU and did not view the contacts by Mary Easley as improper.

Additional documents detail attempts to raise money from national, state and county alcohol control groups or associations. One has a handwritten notation that Easley would "call in these favors [for] her & Mike." The Easleys' spokesman said the notes were taken without Mary Easley's knowledge or approval.

That type of talk was used more than once, Brown said. An e-mail message from Mary Easley to Brown mentions one of the state's major road contractors, Barnhill Construction Co. "Dear Wendy," Mary Easley wrote in September 2007, "this is the Barnhill construction that I was thinking about." Brown said she doesn't recall contacting the road company, and it is not listed as a speaker seminar donor.

Brown said the conversation she recalls most clearly is about the alcohol groups, which gave a combined $16,500 in summer 2007 to help sponsor a visit by then-acting U.S. Surgeon General Kenneth P. Moritsugu, who spoke on alcohol issues.

As first lady, Easley had focused on the dangers of underage drinking; and she gave speeches to alcohol groups and others on the topic while taking a national role on the issue.

But her husband appointed Doug Fox, a Wilmington lawyer, as chairman of the state ABC Commission in 2004 at an annual salary of $110,000. Mike Herring, the commission's staff administrator, said the fundraising efforts were the result of a conversation between Fox and Mary Easley of which he was not a part. Fox, who recently resigned from the commission over an unrelated controversy, could not be reached.

The commission controls all the state's liquor, oversees regulation of violations and supervises county-level boards. Documents show that Fox, as part of donating $5,000 of state-funded ABC Commission money to the surgeon general's speech, secured tickets for the speech and a reception at the governor's mansion for several people. Among them was a lobbyist for a brokerage company that represents brands such as Crown Royal, Smirnoff and Jim Beam.

Through the spokesman, Easley said that her NCSU boss, Nielsen, directed her to call the alcohol groups for money.

E-mail messages from Herring, the staff administrator, to Easley in August 2007 reflect the efforts to raise money. At one point, Herring wrote to Brown and copied Easley after getting a commitment from the national ABC boards association: "Total raised now is $15,000. Please let me know if additional support is needed."

"I helped collect it," Herring said, "but don't know much more."

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